Decoding the Characteristics of RWA in Mainland China: Practical Features, Risk Analysis, and Optimization Pathways

Authors of this article: Shao Jiadian, Liu Honglin

If you were lamenting last year that RWA was just a high-end game played by overseas financial institutions, this year you have likely already heard the term "RWA" in art exchanges, farms, and even liquor factories.

RWA projects in mainland China no longer chase traditional U.S. Treasury bonds or commercial real estate, but have found a new path, opting for the "local living" route. Think about it: Malu grapes, airport VIP lounges, rights to pick up liquor... It sounds no longer cold, but rather infused with a bit of the romanticism of explorers and practical down-to-earthness.

Next, let's talk about this group of "light and beautiful" mainland RWAs, how they are dancing a new dance between blockchain and the real economy, and what unseen risks are hidden within?

The Current Situation and Innovative Practices of RWA in Mainland China

1. Asset Type: A "lightweight" attempt at the integration of consumer rights and industry.

In mainland China, RWA is no longer confined to traditional financial assets for high-frequency trading, but instead targets consumption scenarios that are closer to everyday life. You might see airport lounge services being tokenized, where users no longer hold abstract digital currencies, but actual rights that can be redeemed for a cup of coffee or a boarding spot. For example, the Malu Grape RWA project is quite interesting—it tokenizes grape delivery rights, where investors are not buying bonds or equity, but rather the expectation of whether "the farmers can grow good grapes this year." This model tightly integrates traditional agriculture with blockchain technology, but it also exposes a problem: if the weather is bad that year and yields decline, how is the value behind the token calculated? This gives a sense that "innovation inevitably has its gray areas."

2. Technical Path: Exploring Alliance Chain in a Semi-Closed Ecosystem

Most RWA projects in mainland China choose to use private or consortium blockchains, and trading platforms are often limited to exchanges or digital exchanges. The advantage of this approach is that data is kept in-house, making it easier for regulatory authorities to intervene; however, on the other hand, it loses the kind of freedom, interconnectivity, and liquidity that a global public blockchain offers. Take "Wine Domain Spirit Realm" as an example, it issues "Wine Certificates" based on the consortium blockchain of Boundary Intelligence, with trading strictly limited to specific platforms. This is similar to a fine little tavern, which, although it has a good taste, struggles to compete with international brands of star-rated hotels.

3. Compliance Framework: The Regulatory "Gray Area" and Technical Arbitrage

Currently, there are no specific regulations or supervisory policies regarding RWA in mainland China. Many projects can only wave the beautiful banner of "rights certificates" in an attempt to avoid being classified as securities. However, everyone knows that "regulators are not fools"; even if you superficially claim "no profit commitment," as long as users are thinking "the price will rise," it may lead to the edge of "gray areas" or even "disguised deposit-taking." Many project parties have confidently stated, "This is not a security; users can only operate within the platform, and there’s no way to trade," but the reality is that users will always secretly look for ways to hedge risks outside the platform. As a result, the clues obtained by regulatory authorities will definitely not be easily overlooked.

A Comprehensive Analysis of RWA Compliance Risks in Mainland China

Mainland RWA projects are like a hot stir-fry; they taste good, but if the heat is not controlled well, problems can easily arise.

1. Asset Confirmation - Concerns in the "Gray Area"

Take the RWA of artworks as an example. Some project teams use "digital authentication certificates" to boast their ownership proof, but the problem arises: if the data behind the certificate is falsified or the authentication is erroneous, the blockchain cannot be rolled back. It's like buying a bottle of "genuine counterfeit" cola at the supermarket; no matter how beautifully the label is written, it cannot cover up the poor actual taste.

2. Securities Attributes - Is Playing "Close to the Edge" Really Safe?

Many projects operate under the mantra: "We are only offering rights certificates, definitely not securities!" However, as long as you give users the expectation that it will "rise in value," even if you clearly state that trading is not allowed, users will still entertain themselves in the over-the-counter market. How do regulatory bodies view this? They directly apply the label of "disguised fundraising." As I often say, superficial evasion does not mean there are no risks; regulatory eyes are sharp!

3. Cross-Border Data and Privacy Protection - The Real Dilemma of the "Double Whammy"

Some RWA projects involve foreign investors, and the cross-border transmission of personal information and transaction records must strictly comply with the Personal Information Protection Law. In reality, however, many projects lack compliant data channels, and there are even several consortium chains where improper node permissions have led to user data leakage. Imagine, while you think your data is securely stored, there are hidden risks of privacy breaches lurking behind, which is truly a double blow.

Comparison with mature overseas projects: Innovation and gaps coexist.

1. Asset selection logic: the coexistence of financial depth and innovation

Overseas RWA projects are mainly based on "hard assets" such as government bonds, real estate, and supply chain receivables, with clear value anchors and stable cash flows. For example, Ondo Finance in the U.S. achieves stable returns through the tokenization of government bonds, while Hong Kong's charging pile RWA enhances transparency through data from physical devices. In contrast, mainland projects tend to focus on "soft assets" like consumer rights and agricultural products, lacking depth in financialization. However, their social value in microfinancing and inclusive finance (such as supporting farmers' financing) is commendable.

2. Technical Standardization and Data Credibility

The Hong Kong Monetary Authority promotes the compliant development of digital assets through the Ensemble project sandbox, emphasizing data reliability and transparency, with underlying data often being recorded on-chain in real-time via IoT devices. In contrast, much of the data in mainland China still relies heavily on manual entry, raising concerns about the risk of data tampering.

3. Market Maturity and Regulatory Cooperation

Hong Kong has formed a "regulatory sandbox-industry standards-judicial cooperation" trinity compliance framework. For example, the charging pile RWA project, a collaboration between Ant Group's financial technology subsidiary and Longshine Technology, achieves compliant integration of mainland assets and overseas funds through a Hong Kong SPV structure. However, mainland projects are constrained by foreign exchange controls and poor regulatory communication, and the maturity of the market still needs improvement.

Optimization path: How to walk out a "compliant and self-disciplined" RWA path?

To truly develop a sustainable path for RWA projects in the mainland, it is essential to break through the barriers in regulation, technology, and market ecology.

1. Establish a "Categorical Supervision" Framework

For RWA projects that are merely exchange services, similar to membership systems, such as airport lounges or grape delivery rights, it is entirely feasible to follow the "consumer goods regulation" path—clearly defining the scope of services and boundaries of responsibility. Conversely, for RWA with obvious income rights, it is necessary to refer to securities standards and adopt a "securitization sandbox" to ensure that information disclosure, KYC, and AML are all in place. This way, you won't fear regulation, and regulators won't randomly create issues.

2. Promote the integration of technical standards and judicial evidence preservation

It is mandatory for physical asset on-chain projects to adopt a "IoT + blockchain" dual-channel verification, allowing data to be verified by judicial appraisal institutions before being put on the chain, ensuring that every piece of data is traceable. At the same time, it supports local courts in exploring the rules for the admissibility of "on-chain evidence," lowering the threshold for users to protect their rights.

3. Explore the compliance path of "Domestic Assets - Offshore Financing"

Drawing on the model of Hong Kong Langxin Technology, issue RWA tokens through Hong Kong SPV, introduce foreign capital using a regulatory sandbox, and pilot the "RWA Cross-Border Financing Whitelist" in cooperation with the foreign exchange administration, simplifying the fund repatriation approval process. This not only expands financing channels but also ensures compliance in the process, avoiding a repeat of the P2P debacle.

Summary by Lawyer Mankun

There is still no unified answer on how to navigate the RWA path in Mainland China. From the projects observed so far, "not finance, not securities, only services" is not a panacea. If you merely "play dumb" for the sake of compliance, you will ultimately struggle to escape the heavy hand of regulation; projects that truly want to succeed must be clear about one thing: are you practicing self-discipline for long-term development, or are you gaming for short-term financing? Today it may be grapes and liquor, but if tomorrow it turns into "RWA version P2P", the entire industry will have to start over.

In summary, mainland RWA projects have unique advantages and practical value in the exploration of "light assetization" and "localization," but there are still many shortcomings in areas such as asset confirmation, technical standards, and regulatory collaboration. Only through a "triple breakthrough of technical standardization + regulatory sandbox + cross-border collaboration" can they stand out in fierce market competition and truly realize the ideal of empowering the real economy with blockchain.